Public Prosecutor v Goh Jia Poh, Kenneth
[2023] SGDC 3
| Case Number | : | District Arrest Case No 906109 of 2021 and 7 Others, Magistrate's Appeals No 9255 of 2022-01 |
| Decision Date | : | 09 January 2023 |
| Tribunal/Court | : | District Court |
| Coram | : | Paul Chan |
| Counsel Name(s) | : | Cheah Wenjie (Attorney-General's Chambers) for the Public Prosecutor; Wasiur Rehman s/o Baligur Rehman and Sinnadurai s/o T Maniam (Regal Law LLC) for the Accused. |
| Parties | : | Public Prosecutor — Goh Jia Poh, Kenneth |
Criminal Procedure and Sentencing – Sentencing – Market rigging – Section 197(b) Securities and Futures Act (Chapter 289, 2006 Revised Edition)
Criminal Procedure and Sentencing – Sentencing – Deceptive practice – Section 201(b) Securities and Futures Act (Chapter 289, 2006 Revised Edition)
Criminal Procedure and Sentencing – Sentencing – Fraudulently inducing persons to deal in securities – Section 200(1)(a) Securities and Futures Act (Chapter 289, 2006 Revised Edition)
[LawNet Editorial Note: An appeal to this decision has been filed in MA 9255/2022/01.]
District Judge Paul Chan:
1 The accused, Mr Goh Jia Poh, Kenneth, is a Singapore citizen, presently aged 35. He faced eight criminal charges for market rigging, unauthorised use of share trading accounts and making false statements to induce other individuals to invest in shares. These are offences under the Securities and Futures Act (Cap 289, 2006 Rev Ed) (the “SFA”). He pleaded guilty to four of these charges and consented to having the other four charges taken into consideration for the purpose of sentence. After consideration, I sentenced the accused to an aggregate sentence of 19 months’ imprisonment and a fine of $355,604 (in default 18 months’ and two weeks’ imprisonment) with brief grounds. As an appeal has since been filed, I now provide full reasons for my decision.
The charges
2 The accused pleaded guilty to the following charges.
DAC-906109-2021 (“ 2nd charge ”)
You… are charged that you, on not less 325 trading instances, between 6 January 2016 and 20 September 2018 (both days inclusive), in Singapore, did engage in a course of conduct through placing orders and trading of shares in each of the securities in Annex A[note: 1], which are capital market products listed on the Singapore Exchange Securities Trading Limited (“SGX-ST”), a securities exchange in Singapore, for the purpose of creating a false appearance with respect to the market for the said securities on SGX-ST, to wit, by using various trading accounts to:
(a) Enter your target sell orders for the security, which would be at a higher price than that of the best available sell order;
(b) Buy shares in the security;
(c) Enter false buy orders for shares in the security, which you did not intend to execute (“False Bids”), to create a false demand and cause the price in the security to rise;
(d) Execute your target sell orders to sell your shares in the security for a profit; and
(e) Delete your False Bids around the same time or after you had executed your target sell orders,
and you have thereby committed 325 offences under section 197(1)(b), punishable under section 204(1) of the Securities and Futures Act (Chapter 289, 2006 Revised Edition), which is an amalgamated charge pursuant to section 124(4) of the Criminal Procedure Code (Chapter 68, 2012 Revised Edition).
DAC-906110-2021 (“ 3rd charge ”)
You… are charged that you, between 11 January 2016 and 20 September 2018 (both days inclusive), in Singapore, directly in connection with the purchase and sale of shares of various securities traded on the Singapore Exchange Securities Trading Limited (“SGX-ST”), a securities exchange in Singapore, did engage in a practice which operated as a deception upon UOB Kay Hian Pte Ltd (the “Firm”), to wit, by using Ng Lee Cheng’s (“Ng”) trading account No. XXX maintained with the Firm to enter orders and execute trades in various securities (as set out in Annex A) without duly notifying the Firm in writing to seek its prior consent, which deceived the Firm that the orders and trades in the various securities were instructed by Ng, and you have thereby committed an offence under Section 201(b), punishable under Section 204(1) of the Securities and Futures Act (Chapter 289, 2006 Revised Edition).
DAC-906112-2021 (“ 5th charge ”)
You… are charged that you, between 11 January 2016 and 9 July 2018 (both days inclusive), in Singapore, directly in connection with the purchase and sale of shares of various securities traded on the Singapore Exchange Securities Trading Limited (“SGX-ST”), a securities exchange in Singapore, did engage in a practice which operated as a deception upon OCBC Securities Pte Ltd (the “Firm”), to wit, by using Goh Beng Heng’s (“Goh”) trading account No. XXX maintained with the Firm to enter orders and execute trades in various securities (as set out in Annex A) without duly notifying the Firm in writing to seek its prior consent, which deceived the Firm that the orders and trades in the various securities were instructed by Goh, and you have thereby committed an offence under Section 201(b), punishable under Section 204(1) of the Securities and Futures Act (Chapter 289, 2006 Revised Edition).
DAC-901868-2022 (“ 7th charge ”)
You… are charged that you, in the period between 30 July 2020 and 26 August 2020, did make statements on 9 occasions in a Telegram chat group titled “SGX Penny Stocks Discussion” (Annex A) that you knew to be false, to induce persons to deal in the shares of Singapore Medical Group Limited, Fu Yu Corporation Limited, Secura Group Limited, Global Invacom Group Limited, Yongnam Holdings Limited, The Trendlines Group Limited, ASTI Holdings Limited, Asian Healthcare Specialists Limited and Starburst Holdings Limited, which are capital market products listed on the Singapore Exchange Securities Trading Limited, and you have thereby committed 9 offences under section 200(1)(a) punishable under section 204(1) of the Securities and Futures Act (Chapter 289, 2006 Revised Edition), which is an amalgamated charge under section 124(4) punishable under section 124(8)(a)(ii) of the Criminal Procedure Code (Chapter 68, 2012 Revised Edition).
3 The charges taken into consideration for the purposes of sentence were as follows:
(a) DAC-906108-2021 (“1st charge”) – similar to the 2nd charge, this was an amalgamated charge for market rigging offences. In this instance, the charge provided that the accused had committed 77 market rigging offences and had thereby made a profit of $78,904.80.
(b) DAC-906111-2021 (“4th charge”) – similar to the 3rd charge, this was a charge for using a trading account of Ng Lee Cheng without authority. In this instance, the account was held with OCBC Securities Pte Ltd.
(c) DAC-906113-2021 (“6th charge”) – similar to the 5th charge, this was a charge for using a trading account of Goh Beng Heng without authority. In this instance, the account was held with UOB Kay Hian Pte Ltd.
(d) DAC-901869-2022 (“8th charge”) – similar to the 7th charge, this was a charge for making false statements to induce other individuals to deal in certain shares. In this instance, there were three occasions of offending which took place on 25 and 28 August 2020.
Facts
4 At the time of his offences, the accused was a part-time private-hire driver and a day-trader. His parents are Ng Lee Cheng and Goh Beng Heng, whose trading accounts are the subject matters of the 3rd to 6th charges.
5 The relevant facts, as presented in the Statement of Facts, are reproduced below. The accused admitted to these facts without qualification.
6 The facts pertaining to the 2nd charge were as follows.
5 Investigations revealed that on 325 occasions between 6 January 2016 and 20 September 2018 (both days inclusive), the accused employed a modus operandi to create a false appearance with respect to the market for 117 securities traded on the SGX. The accused’s purpose was to create a false impression that there was substantial demand from buyers in the particular security, and thereby, to induce other market participants into buying the security, and drive up the price of the security, allowing him to sell his stake in it for a profit.
6 The modus operandi, as detailed below, was employed on each of the 117 securities, typically over 10 – 30 minutes on each occasion:
a. The accused would place a sell order for the security in question at a price which was one or two ‘ticks’ above the prevailing best sell price (the “Target Sell Order”). A ‘tick’ refers to the smallest price increment that the price of a security can change by, while the ‘prevailing best sell price’ refers to the lowest priced sell order that is available on the market at any one time. The price of the accused’s Target Sell Order was the target price that the accused intended to manipulate the price of the security up to and thereafter sell at.
b. The accused would also purchase shares at the prevailing best sell price in order to clear the market of all existing sell orders that were priced below that of the accused’s Target Sell Order. This effectively meant that the accused’s Target Sell Order held the prevailing best sell price for the time being.
c. Around the same time, the accused would then create a false appearance with respect to the market for the security in two ways:
i. One, the accused would place multiple large bids at or near the prevailing best buy price for a large volume of shares of the security in question (“False Bids”). The ‘prevailing best buy price’ refers to the highest-priced buy order placed on the market at any one time. The accused did not intend to execute these False Bids, but rather, to delete them before they could be executed. The accused would use multiple trading accounts to make these False Bids, including accounts opened in the name of his parents, as the volume of his False Bids would exceed the trading limits imposed on each trading account.
ii. Two, the accused would on most occasions simultaneously also make multiple small-volume purchases of the security of around 100 shares each (which was close to the minimum number of shares that could be purchased at a time) at the prevailing best sell price, which, at this point in time, was the price of the accused’s Target Sell Order.
d. The purpose of placing large False Bids and making small-volume purchases at the prevailing best sell price was to create a false appearance that there was substantial demand and an active market for the security in the market.
e. As a result of the false impression created by the accused, other market participants were induced into entering the market and buying the security, thereby increasing its demand and thus price.
f. Once the price of the security reached that of the accused’s Target Sell Order, the accused would execute those orders and sell off his shares in the security, making a profit in the process.
g. Around the same time or after the accused had executed his Target Sell Order, the accused would delete all the False Bids he had earlier made.
7 In total, the accused employed this modus operandi on 325 occasions across 6 January 2016 to 20 September 2018 for each of the securities listed in Annex A[note: 5].
8 On each of these 325 occasions, the accused engaged in a course of conduct through placing orders and trades in each of the aforementioned securities, for the purpose of creating a false appearance with respect to the market for the said securities.
9 As a result of this offence (i.e., the 2nd charge), the accused made a gross profit of at least $285,625.90. Using the modus operandi stated above, the accused made a total gross profit of at least $364,530.70 (for the 1st and 2nd charges). After accounting for commissions, fees and taxes, the accused made a net profit of at least $211,307.53 for the 2nd charge alone, and a total net profit of at least $274,969.16 across the 1st and 2nd charges. The accused retained all the profits of his offending. He used $200,000 of the profits to contribute to the purchase of a condominium, spent $120,000 of the profits on a down-payment for a car, and kept the remainder of the profits for his own purposes.
7 The facts pertaining to the 3rd and 5th charges were as follows.
11 Across 402 occasions wherein the accused had created a false appearance with respect to the market (consisting of the aforementioned 325 occasions in the 1st charge and the 77 occasions in 2nd charge), the accused had utilized seven different trading accounts to execute his modus operandi. Investigations revealed that four of these trading accounts belonged to Ng and Goh.
12 At all material times, Ng was the registered account holder of trading account no. XXX maintained with UOB Kay Hian Pte Ltd, while Goh was the registered account holder of trading account no. XXX maintained with OCBC Securities Pte Ltd (together “Ng and Goh’s trading accounts”).
13 Investigations revealed that between 11 January 2016 and 20 September 2018 (both days inclusive), the accused entered orders and executed trades through Ng and Goh’s trading accounts on the occasions as listed at Annex B[note: 6] and Annex C respectively. The accused admitted that he needed to use his parents’ trading accounts because he did not have enough trading limits in any single account to place sufficiently large False Bids as part of his modus operandi (as above at [6]). The two brokerage firms did not know and did not consent for trades to be placed through those accounts, by or on the instructions of anyone other than the accountholders, and for the benefit of anyone other than the accountholders.
14 By placing trades in Ng and Goh’s accounts as set out in Annex B and Annex C, which trades were placed without the brokerages’ knowledge or consent, and which trades were beneficially owned by the accused, the accused did engage in a practice which operated as a deception upon UOB Kay Hian Pte Ltd and OCBC Securities Pte Ltd. The accused thus committed two counts of an offence under Section 201(b) of the SFA, punishable under Section 204(1) of the same Act.
15 While both Ng and Goh were aware that the accused was using their trading accounts, they did not know what the accused was using the accounts for. The accused kept all profits made from the trades involving Ng and Goh’s trading accounts.
8 The facts pertaining to the 7th charge were as follows.
Persons Involved
16 The co-conspirator is Oon Yun Cong, male, 33 years old (“Oon”) He was a day-trader at all material times.
Background Facts
17 The accused and Oon were long-time friends who first knew each other while serving their National Service in the army. The accused and Oon often discussed stocks with each other, and even co-authored a blog, providing technical analysis and commentaries on trading in Singapore-listed stocks, at SGXWinners.blogspot.com. The last post was on 2 March 2020 and the blog registered 748,000 page views in total.
18 The accused and Oon were participants of two Telegram chat groups titled “Trade with the Wind” (“TW2 Chat”) and “SGX Penny Stocks Discussion” (“Penny Chat”), wherein they went by the usernames of John Ng and Heegul Karmal Tan respectively. Both chat groups discuss about stock trading in the Singapore stock market. At all material times, TW2 Chat had approximately 980 members and Penny Chat had approximately 1,975 members.
Influence in the Telegram Chat Groups
19 The accused and Oon were highly active members in the Penny Chat and posted messages frequently. Investigations revealed that the accused was the third-most frequent messenger in the chat group and posted an average of 98 messages per day in the Penny Chat.
20 The accused was given the title of “Spotter” by the administrator of the Penny Chat sometime around 26 October 2020, which the accused admitted that he understood to mean that he was “good at spotting stocks” whose prices were likely to rise. According to the accused, he was aware of his influence in the Penny Chat, and he believed that he had a “following” in the Penny Chat, and that “other chat members believe that [he was] good at seeing how stocks would move.”
…
Facts pertaining to the offence in the 7th charge (DAC-901868-2022)
22 Investigations revealed that on 9 occasions between 30 July 2020 and 26 August 2020, the accused made statements in Penny Chat that he knew to be false, in order to induce persons to deal in the shares of various securities listed in Annex D[note: 8], which are capital market products listed on SGX. These messages were made as part of his modus operandi to “pump” up the value of the various securities in which he had purchased, in order for him to sell them off at a profit. The modus operandi is detailed below:
a. The accused would first target a security, and purchase shares in the security at the prevailing best sell prices. At or around the same time, he placed a sell order for around the same number of shares at a few ticks higher than the price he bought them at (the “Target Price”).
b. The accused then promoted the targeted security in the chat group by making false statements. Through these false statements, the accused drove up the share price. For example, in order to induce other chat members to purchase shares at higher prices, he would make false statements that he had purchased more shares or intended to buy more shares at a certain high price, or also that his target price for the material shares was a certain price, when in fact his Target Price was lower than this price he stated.
c. To give credence to his falsehood, on most occasions he would also place small buy orders (or around 100 – 500 shares) at the then-best sell price, to create an impression of genuine buying interest in the market.
d. The share price then rose as chat group members were induced to place buy orders at higher prices. Eventually, the accused’s standing sell order at the Target Price would be executed and he would make a profit from the scheme.
23 The accused applied this modus operandi on at least 9 occasions detailed at Annex D. The accused admitted that his modus operandi was intended to induce the chat group members to purchase these securities he was promoting, by giving them false confidence in these securities through his false statements.
24 By virtue of the foregoing, the accused has on 9 occasions committed an offence under section 200(1)(a) of the SFA, which offences are amalgamated into a single charge under section 124(4) of the CPC.
25 In addition to the above 9 occasions, investigations revealed that on at least 3 other occasions between 25 August 2020 and 28 August 2020, the accused had roped in Oon to also make false statements in the Penny Chat and/or TW2 Chat. On those occasions, the accused and Oon would communicate privately with each other on Facebook Messenger to coordinate their making of false statements relating to counters. Either or both the accused and Oon would then post false statements on the Penny Chat and/or TW2 Chat in order to induce others to purchase shares in the promoted security. Furthermore, at the time of the accused’s offences in the 7th and 8th Charges (DAC-901868-2022 and DAC-901869-2022 respectively), the accused was already under investigations for his earlier offences in the 1st to 6th Charges, and had already given multiple statements to investigators admitting to the earlier offences.
26 Investigations revealed that the accused’s actions resulted in the prices of the relevant securities to increase during the period in which the accused was actively falsely promoting the securities, allowing him to sell his shares for a profit. On the 9 occasions detailed at Annex D (i.e., the 7th charge), the accused’s gross profit amounted to at least $5,537.10. Across all 12 occasions, including the 3 occasions in the 8th charge, the accused’s gross profit was at least $7,160. After accounting for commissions, fees and taxes, the accused made a net profit of at least $4,245.90 for the 7th charge alone, and a total net profit of at least $5,604.24 across the 7th and 8th charges. The accused further admitted to investigators that he had employed this modus operandi on other occasions as well, and that in total, he had made an overall profit of around $50,000 in this manner.
Prescribed penalties
9 Pursuant to section 197(1)(b) punishable under section 204(1) of the SFA, the penalty prescribed for the 2nd charge is a fine not exceeding $250,000 or imprisonment for a term not exceeding seven years or both. However, as this is an amalgamated charge under section 124(4) of the Criminal Procedure Code (Cap 68, 2012 Rev Ed) (“CPC”), the punishment is enhanced by two times pursuant to section 124(8)(a)(ii) of the CPC.
10 Pursuant to section 201(b) punishable under section 204(1) of the SFA, the penalty prescribed for the 3rd and 5th charges is a fine not exceeding $250,000 or imprisonment for a term not exceeding seven years or both.
11 Pursuant to section 200(1)(a) punishable under section 204(1) of the SFA, the penalty prescribed for the 7th charge is a fine not exceeding $250,000 or imprisonment for a term not exceeding seven years or both. However, as this is an amalgamated charge under section 124(4) of the CPC, the punishment is enhanced by two times pursuant to section 124(8)(a)(ii) of the CPC.
Antecedents
12 The accused is untraced.
Parties’ submissions
Prosecution’s submissions on sentence
13 As regards the 2nd charge, the Prosecution submitted that a sentence of at least 12 months’ imprisonment and a fine of $250,000 should be imposed. In taking this position, the Prosecution took into account factors going towards harm (namely, scale of the market rigging and the extent of distortion to the market) as well as factors going towards culpability (such as the offender’s role, the degree of planning and premeditation and the level of sophistication of the scheme). The Prosecution also accounted for the fact that the accused had pleaded guilty which has saved State resources but also argued that the objective evidence was overwhelming.
14 As regards the 3rd and 5th charges, the Prosecution submitted that fines of $50,000 each should be imposed. The Prosecution noted that the present case was one where the entities which did not give consent to the use of the trading accounts by the accused were the securities firms with whom the accounts were opened and not the accountholders. In such cases, imprisonment would not be the norm but stiff fines were still warranted owing to the scale and duration of the deception.
15 As regards the 7th charge, the Prosecution submitted that a sentence of at least 8 months’ imprisonment and a fine of $5,604 should be imposed. Here, the Prosecution highlighted that the two chat groups in question had large numbers of members and the accused knew that he had some influence in these groups. It was also relevant that the accused committed the 7th charge while already under investigation for other charges. In the Prosecution’s view, the accused’s re-offending represented a disregard for the law and a lack of remorse for his earlier offending.
16 As regards the aggregate sentence, the Prosecution took the position that the imprisonment terms for the 2nd and 7th charges should run consecutively as they were unrelated offences. This would yield an aggregate sentence of at least 20 months’ imprisonment and a fine of $355,604. In the Prosecution’s judgment, such an aggregate sentence would not offend the totality principle.
Mitigation and Defence’s submissions on sentence
17 In mitigation, the Defence highlighted the accused’s personal circumstances. In this regard, the Defence submitted that the accused was responsible for meeting the physical and financial needs of his elderly parents, he struggled to meet the monthly household expenses for his family and he performed well in university. It was also submitted that mitigation weight should be accorded on the grounds that the accused had pleaded guilty, had no antecedents and had cooperated with the police investigations.
18 In relation to sentence, the Defence made the following submissions.
(a) As regards the 2nd charge, the Defence took the position that a sentence of 12 months’ imprisonment (which the Prosecution sought) would be excessive and that a fine should be imposed instead. (Although the Defence did not state so specifically, it appeared, by process of elimination, that the Defence had in mind a fine of $100,000.) The Defence took the position that the scale of market rigging was low and the market distortion was limited as the stocks involved were penny stocks and there was no sustained campaign of market rigging. Insofar as culpability was concerned, the Defence submitted that the scheme was not sophisticated and did not involve much planning or premeditation – it was said to be a “straightforward ‘pump’ and ‘dump’ situation”. It was also submitted that the accused did not realise that what he was doing was wrong.
(b) As regards the 3rd and 5th charges, the Defence took the position that fines of $30,000 each should be imposed. The Defence submitted that the number of trading accounts was not high and no losses were caused to the two brokerage firms. The accused, it was argued, had agreed to help his parents grow their retirement funds and he again did not know that what he was doing was wrong.
(c) As regards the 7th charge, the Defence submitted that an imprisonment term of 4 months and a fine of $5,604 should be imposed. It was argued that, while the accused had posted false information in chat groups with many members, this was not as grave as posting such information on the internet. The Defence submitted the accused had ceased his market rigging offences when he was under investigation by the police. He therefore came up with another way to trade but did not realise that this other way was also wrongful.
19 The Defence therefore submitted that the aggregate sentence should be imprisonment for not more than 4 months and a fine of $165,604.
Judgment of the Court
20 The only issues presented for determination are the sentences to be imposed for each charge as well as the aggregate sentence. I will deal with each in turn.
Sentence for the 2nd charge
21 It cannot be gainsaid that deterrence should generally be the principal sentencing consideration where an offence of market rigging is concerned. In this regard, the High Court in Ng Geok Eng v Public Prosecutor [2007] 1 SLR(R) 913 (“Ng Geok Eng”) made three important points that are pertinent to the present case.
22 First, the offence of market rigging is a serious offence that strikes at the fundamental integrity of our securities market by undermining public confidence in the industry. This point was expressed in the following manner in Ng Geok Eng (at [62]):
A market regime in which false trading is rife is undoubtedly one that will be unable to garner any semblance of investor confidence. Whilst a rogue broker who fraudulently uses his client’s trading account is undeniably guilty of jeopardising the public confidence in the securities industry, the same can equally be said of an accused who artificially inflates or deflates share prices to distort the true forces of market supply and demand. The unsettling effects of false trading and market rigging was expounded on by Ipp J in the Western Australia case of R v Lloyd (1996) 19 ACSR 528 at 540:
[A]s his Honour pointed out, the “main concern quite apart from those individual losses is the loss of faith and trust by the genuine share buying public in the operations of the securities market”. As senior counsel for the appellant pointed out, there is a critical need for investors, be they Australian or foreign, to have confidence in the Australian securities market, that being a factor vital to the Australian economy. That confidence depends upon the securities market having integrity, and being seen to have integrity, and that integrity is undermined by market rigging schemes such as that in which the respondent was concerned. The harm to the securities market is, indeed, a feature which seriously aggravates the criminality of the respondent’s conduct. [emphasis added]
23 Following from that, it is incorrect to view market rigging as a victimless crime. Indeed, the victims are all the other members of the investing public: Ng Geok Eng (at [63]):
Whilst unauthorised trading on investors’ accounts causes tangible harm to identifiable members of the public, ie the account holder in question, it cannot be said that the effects of false trading and market rigging are in any way less real or severe. In the Hong Kong case of Securities and Futures Commission v Choi Wai Zak [2003] 1 HKC 30 at [19], Lugar-Mawson J made the following observations when sentencing the two offenders to four months’ imprisonment for each charge of false trading:
What has to be borne in mind is this—and it may well have been forgotten by counsel both at trial and today on appeal—market manipulation is a serious offence. It is one the legislature has chosen to penalise by providing for a sentence of immediate imprisonment of two years’ imprisonment. It is an offence that strikes at the fair and honest operation of the securities market. It is not a victimless crime; its victims are all the other members of the investing public. It is an offence that can lead to large profits for the offender and to … equally large losses to the investing public. And, perhaps, most importantly, it is an offence that necessarily involves those who commit it doing so by deception and dishonesty. [emphasis added]
24 Accordingly, an offence of market rigging should generally not be met with a fine and the courts should not shy away from imposing a custodial sentence for such an offence. After all, “[i]f the profits were sufficient, a fine would likely be regarded as in the nature of a licence to carry on such operations: Ng Geok Eng (at [61] and [65]), quoting the Ontario Court of Appeal in R v MacMillan [1968] 1 OR 475 (at 482-483).
25 In the present case, I did not agree with the Defence’s position that a fine for the 2nd charge would be adequate to serve the ends of deterrence, much less a fine in the amount of $100,000. In arriving at this determination, I considered the following factors.
Factors going towards harm
(a) I disagreed with the Defence that the scale of market rigging in the present case was low. The Defence highlighted that the securities involved were penny stocks. However, this factor must be considered alongside the fact that there were 325 instances of market rigging involving 117 securities over a period more than 2.5 years. While the accused did not target any one security in particular, this was doubtless a sustained campaign of market rigging. The accused did this by utilising seven different trading accounts, four of which did not belong to him.
(b) The extent of market distortion also could not be considered small, even having regard to the fact that the securities in question were penny stocks. On each occasion of market rigging, the accused made multiple false bids; in total, the accused made at least 9,249 false bids. This, to my mind, was an extraordinarily high number. The volume of shares ordered in his false bids were not always small either – the accused made false bids ranging from two times to more than 90 times his actual shareholding.
(c) As a result of the offence set out in the 2nd charge, the accused made a gross profit of at least $285,625.90 and a net profit of at least $211,307.53.
Factors going towards culpability
(d) The Defence’s position that the offending did not involve much planning or premeditation could not be countenanced. Consider that the manner of offending on each occasion required the execution of multiple steps which were not always straight-forward. Consider also the fact that, insofar as the 2nd charge was concerned, the offence was repeated more than 300 times. Finally, consider that the accused went to the length of procuring additional share trading accounts from his parents in order to circumvent the trading limits imposed on each account. Assessed holistically, it was plain to me that there was in fact serious premeditation.
(e) The scheme was a fairly elaborate one, designed to make the distortion of supply and demand seem like the natural consequence of genuine market forces. The scheme included clearing the market of all existing sell orders priced below the accused’s targeted price, placing multiple false bids at the prevailing best buy price for a large number of shares in order to generate the false appearance of demand and making multiple small-volume purchases at the prevailing best sell price to reinforce that false appearance. Once the price of the security in question reached the desired level, the accused would sell his shares in the security while simultaneously deleting all previous false bids made. Each of these steps required careful coordination and timing.
(f) The fact that the accused repeated his offending over a lengthy period of over 2.5 years also suggested that there was a fairly high commitment to offending.
(g) The accused was solely responsible for the planning and execution of the scheme and he alone was the direct beneficiary of the profits. All said, the accused was motivated by greed. The accused used $200,000 of the profits to contribute to the purchase of a condominium and spent $120,000 on the down-payment for a car. He kept the rest for his own purposes. It was argued by the Defence that the accused was not motivated by personal gain; he had simply wanted to support his retired parents. It was not made clear how the purchase of a condominium and a car went towards supporting his retired parents. For instance, no argument was made that the condominium and car were purchased in the name of his parents or were principally for his parents’ use. In any event, this argument possessed little mitigating weight. The fact of the matter was that the accused did what he wanted with the money; he was not compelled by circumstances to offend.
26 Insofar as mitigating factors were concerned, I had regard to the fact that the accused had pleaded guilty and had thus saved precious State resources. On the other hand, I did not accord any weight to the fact that the accused, with an imprisonment term, would no longer be in a position to provide for his parents’ financial and physical needs for a period. It is an established principle of law that hardship caused to an accused’s family by a term of imprisonment would generally carry little weight as a mitigating factor unless there are clearly exceptional reasons for taking them into account: Lim Choon Kang v Public Prosecutor [1993] 3 SLR(R) 254 (at [5]). Similarly, it was also not relevant that the accused may not have known that what he was doing was a crime: Tan Chye Hin v Public Prosecutor [2009] 3 SLR(R) 873 (at [28]). Finally, I accorded little mitigatory weight to the accused’s lack of antecedents. A lack of antecedents may suggest that an offence may be a departure from and inconsistent with the offender’s general character. If so, a lighter sentence may be appropriate, given the less pressing need for specific deterrence. However, this can hardly be the case when the offender has committed multiple offences over a substantial period of time: Chen Weixiong Jerriek v Public Prosecutor [2003] 2 SLR(R) 334 (at [15]).
27 Insofar as aggravating factors were concerned, there was a similar charge of market rigging (i.e, the 1st charge) to be taken into account for the purpose of sentencing.
28 I turn now to consider the sentencing precedents. There were two significant cases cited before this court.
29 The first was the aforementioned High Court case of Ng Geok Eng. In this matter, the offender pleaded guilty to four charges, including one for market rigging. He had manipulated the share price of Autron Corporation Limited (“Autron”) by “marking the close” – he had purchased the shares of Autron near the close of a day’s trading in an attempt to alter the closing prices of Autron shares. The offender had used at least 18 accounts to do this and did so to avert margin calls on his own accounts. The offender’s offending took place for slightly over a year (from 1 April 2002 to 30 April 2003) and the High Court considered this pervasive and sustained: Ng Geok Eng (at [76]). However, it appeared that the offender’s actions were only partially successful; the closing prices for Autron shares were higher than the pre-closing last prices on 56 out of 131 days when the offender offered a bid more than the pre-closing last price. All things considered, the offender was sentenced to six months’ imprisonment for the offence of market rigging.
30 Another occasion to consider the offence of market rigging was presented in the case of Lau Wan Heng v Public Prosecutor [2021] SGHC 240 (“Lau Wan Heng”). In this matter, the offender pleaded guilty to 13 offences, including one for market rigging. She was part of a larger group of individuals who was responsible for manipulating the share price for Koyo International Ltd (“Koyo”) for a period of about 18 months (from 12 August 2014 to 15 January 2016). The offender’s specific involvement was in procuring 31 trading accounts to be used in the scheme. The accounts the offender provided were used to perform 5,544 trades on a total of 176 days. Following the unravelling of the scheme, Koyo’s share price crashed by almost 84% and Koyo’s market capitalisation fell by more than $58 million. The accounts provided by the offender incurred a total loss of $3,119,034.93. In upholding a sentence of 20 months’ imprisonment for the market rigging offence, the High Court considered that the offender contributed substantially to a scheme which was of a very large scale and that the scheme caused extensive financial loss.
31 I agreed with the Prosecution’s view that the present case was more egregious than Ng Geok Eng and somewhat less egregious than Lau Wan Heng in terms of the severity of harm and culpability. I was mindful that the offender in Ng Geok Eng used 18 different trading accounts while the present accused used seven accounts. Nevertheless, the present case was more pervasive, given that the offending occurred over twice the period of time and involved 126 unique securities. The present case was less egregious than Lau Wan Heng as the extent of distortion to the market and financial loss caused was not as great in the present case.
32 Despite the fact that the High Court in Ng Geok Eng and Lau Wan Heng imposed terms of imprisonment for market rigging offences, the Defence sought for a fine to be imposed, relying on a case involving an offender by the name of Kris Wiluan. The Defence did not cite any issued judgment or grounds of decision but relied on reports by news outlets which indicated that the offender was fined $480,000 in October 2022 for three counts of market rigging. In this regard, it suffices to restate the principle that “sentencing precedents without written grounds are of relatively little (if any) precedential value because they are unreasoned”: Public Prosecutor v GED and other appeals [2022] SGHC 301 (at [128]). Given that the precise reasons for the imposition of a fine in the case of Kris Wiluan were not known to the court, it was not possible to have any regard to that case.
33 In light of the sentences meted out in Ng Geok Eng and Lau Wan Heng, and bearing in mind the relevant offence-specific and offender-specific sentencing factors highlighted, I imposed a sentence of 12 months’ imprisonment for the 2nd charge. In addition, I considered it appropriate to further impose a fine to disgorge the profits made by the accused. It is an established principle of law that where an offender is sentenced to an imprisonment term, the court may, in addition to that imprisonment term, impose a fine: Public Prosecutor v Su Jiqing Joel [2021] 3 SLR 1232 (at [37]). The primary purpose for doing so would be to disgorge the profits made from illegal behaviour. In the present case, the accused made substantial profits from his market rigging offences. If the profits were not disgorged, the accused - or other likeminded individuals - may well reason that serving the imprisonment term was worth the profits made. Given that the accused earned a total net profit of at least $274,969.16 across the 1st and 2nd charges, I imposed, in addition to the term of 12 months’ imprisonment, a fine of $250,000 (which is the maximum fine prescribed by law).
Sentence for the 3rd and 5th charges
34 The 3rd and 5th charges involved the unauthorised use of share trading accounts. In this regard, the High Court in Ng Geok Eng distinguished (at [36]) between two different ways in which such an offence may be committed:
Notably, the term “unauthorised” is in fact capable of bearing two meanings. First, it could refer to the lack of consent on the part of the account owner. Second, it could refer to the lack of consent on the part of the securities trading firm with whom the account was opened.
35 The Court in Ng Geok Eng further held (at [41]) that imprisonment is generally more strongly warranted in situations where the lack of authority relates to the accountholder, rather than the securities trading firm alone. This is because there would be a greater detriment caused to public investors where the lack of authority extends to the accountholder. Conversely, the public interest in deterring such conduct where the lack of authority relates to the securities firm would be considerably less significant, even as such conduct remains objectionable. The degree of sanction required would, in most cases, be sufficiently expressed through a punishment of a lower order: Ng Geok Eng (at [50]).
36 In accordance with the above principles, the High Court in Ng Geok Eng declined to uphold a sentence of imprisonment for unauthorised usage of share trading accounts where the lack of authority related to the securities firms in question. The Court instead imposed a fine of $50,000 for each such charge (with three months’ imprisonment in default). In that case, the offender used at least 12 trading accounts belonging to his wife or another individual.
37 This is not to say that an imprisonment term can never be imposed for such an offence; the court still retains the discretion to determine the appropriate form of sentence where there is consent from the accountholder. The High Court in Lau Wan Heng upheld sentences of six weeks’ imprisonment for each such offence. In doing so, the Court had regard to the scale and duration of the deception. The Court noted (at [102]) that there were 12 proceeded charges for authorised use of share trading accounts, each relating to one account. The deception was carried out concurrently on two securities firms for three to four months. Further, an additional 19 similar charges were taken into consideration for sentencing, involving five other securities trading firms.
38 In the present case, it was not disputed the accused’s parents gave him consent to use their share trading accounts. Hence, the deception occasioned in the present case related to the securities firms in question. Further, although the duration of offending was substantial, the scale of the deception was considerably less severe than that in Lau Wan Heng. The accused in the present case used four such accounts without authority and had deceived only two securities trading firms. There were also no known losses caused to the two firms. In my judgment, the present case was more akin to the situation in Ng Geok Eng. Accordingly, I imposed fines of $50,000 in respect of the 3rd and 5th charges, in default of which the accused shall serve three months’ imprisonment each.
Sentence for the 7th charge
39 The 7th charge was for making statements which the accused knew to be false in a Telegram chat group in order to induce other individuals to deal with certain shares. In this regard, the High Court held in Public Prosecutor v Wang Ziyi Able [2008] 2 SLR(R) 1082 (“Able Wang”) (at [18]) that “disseminating false information can equally disrupt order in the securities market, even if it may appear less devious and reprehensible than rigging the market. It is no less conspicuously serious an offence warranting appropriate punishment, including sentences of imprisonment.” Specifically, the Court held (at [29]) that “[w]here materially false information is disseminated with dishonest intent to induce other persons to purchase or sell shares, a custodial sentence should (in combination with fines) almost inevitably be imposed.” (Emphasis added.)
40 In Able Wang, the offender was convicted on one count of disseminating on an online forum false information relating to Datacraft Asia Limited (“Datacraft”). The offender had made two statements within a 20-minute window which had the likely effect of inducing the sale of Datacraft shares. The Court was mindful that the offender was convicted only of making postings recklessly and not in full knowledge that they were false. Additionally, no evidence was led on the losses suffered by the investing public. In these circumstances, the Court sentenced the offender to 6 months’ imprisonment.
41 In comparison, the culpability of the accused in the present case was higher. The accused admitted to a charge of making statements that he knew to be false; he was not merely reckless. While the Defence pointed out that the Court in Able Wang was of the view that the offender’s conduct may have extended beyond mere recklessness, the fact of the matter is that the Court did not punish the offender in the case of Able Wang for anything more than recklessness for that was the charge preferred against the offender in that case: Able Wang (at [8]). The accused’s conduct in the present case was also somewhat more sustained – he had posted nine statements across a period of one month. Furthermore, the accused employed a certain methodology, as disclosed in paragraph 22 of the Statement of Facts. This included creating a false impression of genuine interest in the market by placing small buy orders. Again, this suggested planning and premeditation. Finally, the accused employed this methodology knowing that he had a certain influence in the chat group in question. He was given a special title by the administrator of the chat group which suggested that he was good at spotting stocks whose prices were likely to rise.
42 Insofar as the harm caused was concern, it was relevant that the chat group in question had approximately 1,975 members. It was argued by the Defence that the harm caused in Able Wang may be graver since the false statement was made on the internet where the reach may be greater. In my view, it was not helpful for present purposes to draw such fine distinctions and distinguish between posting on an internet forum with an unknown number of viewers and posting on a Telegram chat group with 1,975 members. In both instances, the possible dissemination of the information was extremely broad. This was not an instance where the statement was made in a chat group with a limited number of members. Separately the accused also made false statements in relation to nine different securities as compared to the single type of security in Able Wang. In relation to the 7th charge, the accused gross profit amounted to at least $5,537.10.
43 In the accused’s favour, I was mindful that the accused had pleaded guilty while the offender in Able Wang had claimed trial. I accorded this appropriate mitigating weight. On the other hand, there was a similar charge to be taken into consideration for the purpose of sentencing (i.e., the 8th charge). Moreover, the accused had committed the 7th charge while being investigated for other offences (i.e., the 1st to 6th charges). This suggested a disregard for the law and a certain amount of commitment to offending.
44 In consideration of all the above factors, I sentenced the accused to seven months’ imprisonment. As the accused had made a net profit of $5,604.24 across the 7th and 8th charges, I also ordered that a fine in the sum of $5,604 be imposed, in default of which the accused shall serve two weeks’ imprisonment.
Aggregate sentence
45 Generally, sentences for related offences that form part of a single transaction should run concurrently. Conversely, sentences for unrelated offences should run consecutively: Public Prosecutor v Raveen Balakrishnan [2018] 5 SLR 799 (at [39] and [41]). In the present case, there was no question that the 2nd and 7th charges were unrelated offences. Hence, the sentences of imprisonment should run consecutively. This would yield an aggregate sentence of 19 months’ imprisonment and a fine of $355,604 (in default 18 months’ and two weeks’ imprisonment).
46 The final consideration was to ascertain whether there was any need to adjust either the way the sentences were run or the sentences themselves to ensure that the aggregate sentence is just and proportionate. This is known as the totality principle. Having regard to the cases of Ng Geok Eng and Lau Wan Heng, as well as to the fact that the maximum prescribed punishment for the 2nd charge is seven years’ imprisonment and a fine of $250,000, I was not of the view that the aggregate sentence was substantially above the normal level of sentences for the most serious of the individual offences committed by the accused. There was also no argument made, nor any reason to think, that the aggregate sentence would be crushing on the accused.
Conclusion
47 For all of the above reasons, I sentenced the accused to an aggregate sentence of 19 months’ imprisonment and a fine of $355,604 (in default 18 months’ and two weeks’ imprisonment). The accused is presently on bail pending appeal.
___________________________
